DAO The Way Part 4

By xuanling11 | Crypto Learning | 3 Feb 2022

In part 4, we will take a break on the DAO spectrum and dissect what makes a DAO. 



 Humanity is a trust in DAO and helps DAO to build a sustainable community.


DAO = Humanity + Technology


DAO has two components, humanity, and technology. Compared to traditional corporations, which are composed of labor and profit, DAO goes one step further.


Humanity vs. Labor

In DAO, contributors are not a tool. If DAO treats contributors as a tool to reach the goal, it is not a DAO rather it is a corporation that disguises itself as a DAO. Contributors volunteer work on projects and help to build a community that is sustainable. Monetary is not the main goal for them to drive their work toward excellence but a vision that wants to change the current state of the world and make it better.


Humanity Is The Core

Remember humanity when you want to create a DAO. It is an inclusive community to embrace everyone to participate and contribute rather than an exclusive club to screen out people. However, it is also important to have a community rule to keep bad characters away. What makes people devote themselves to work together without trust is humanity that drives everyone toward the same goal. If money is the most powerful tool to gather humans together to accomplish in the 20th century, humanity is a secret source to gather more humans together to accomplish many new challenges in the 21st century.


Four Layers


I mentioned from my previous article about layers of DAO built on. There is an additional layer to make sure your DAO is decentralized yet under special trust circumstances through a security layer. It provides a safe environment for community members to interact and follow ground rules. It also makes contributors receive their compensation safely. 



DAO will have a workforce to continue providing services and drive the community forward. If there is not enough work, the community will soon be dissolved. An example is ConstitutionDAO where they achieved their mission whether or not that mission was successfully reached, but their mission has been completed. The data layer provides a pool for experience sharing and exploration ideas to the social layer which provides members to work together. 



Data and technology can provide the infrastructure of DAO. This infrastructure is a systematic operational node spread out the DAO. Each node works on their own projects yet they carry out the same vision and mission. Nodes will work toward a specialty that later can share their skills to serve the community.



The social layer will create governance based on the security layer. There is always a misconception that technology can automatically govern by itself using a voting blockchain protocol. That is only a part of the story only if such protocol has a security layer. No one can dominate the voting powers or buy out the voting powers. Also, such voting powers cannot be diluted through a control entity. Furthermore, such voting power will have to separate from monetary compensation in order to justify its voting purity on specific purposes to pass proposals rather than general purposes to gain profits on.



The security layer guarantees that technology layer with a secure payment system. Members can receive their compensation safely. Of course, members seek to have a fair payment in DAO and believe they should receive desired compensation. However, fairness will depend on the community voting through governance rather than a few making decisions. Otherwise, DAO will run backward into corporations again. 


In Conclusion

To build a DAO, you may think over the above components and more. Since the environment is not trust-based anymore, you will have the struggle to practice old habits in DAOs. Before you make decisions, perhaps ask yourself if such a decision is really a DAO way or just a most efficient way to complete a task. Because the efficient way is not a DAO way in the long term.


Stay tuned for the next article!

This article is also published in Cryptologist as parnership publication.

Photo by Hal Gatewood on Unsplash
Note: the post was shared on multiple platforms here.

You can refer my previous article lists here
Digital Commodities- the Unlimited Resources of Commodities Has Born
Universal Income in Crypto Way
DeFi 1.0 is Officially Dead - Welcome to DeFi 2.0
NFT Has a New Purpose
How Many Ads Are Too Much - Floki Inu Ads Got Backfire
Metaverse - Second Life Era
Bitcoin ATM Adoption and Its Potential Security Vulnerabilities
When Corporations Are Running By Everyone
The Fundamental Value Is Irrelevant
Coinbase At Huge Reputation Crisis
CBDCs' Flaw Design
Regulations Start Hitting Crypto Exchanges
From Bitcoin Standard To Zero-Knowledge Proofs - Decentralization 2.0
Shiba Hits 1 Million Users (Army) Milestone: What is Next?
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2022 Prediction #1: L1 Scalability
2022 Prediction #2: L2 Bridges
2022 Prediction #3: Zero-Knowledge Proofs or ZKPs
2022 Prediction #4: Regulated Defi On-Chain KYC
2022 Prediction #5: Institutional Crypto Adoption
2022 Prediction #6: Defi Insurance
2022 Prediction #7: NFTs-Based Communities - DAO 1.5
2022 Prediction #8: Metaverse and NFTs
2022 Prediction #9: Web2 Companies’ FOMO
2022 Prediction #10: Time for DAO 2.0
Craig vs People
Polygon Enters ZKPs - Plonky2
Crypto.com Backfire - When Centralized Crypto Service Panic
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Bridging Between Web2 to Web3 Through NFTs
DAO The Way Part 1
DAO The Way Part 2
Who Is The Winner of The Crypto Adoption
Phishing Attacks
DAO The Way Part 3
What You May Expect NFTs After 6 Months and Beyond
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